David Tif 08

Chapter 8: Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues
CHAPTER 8
Implementing Strategies: Marketing,
Finance/Accounting, R&D, and MIS Issues
True/False
The Nature of Strategy Implementation
1. Less than 2 percent of formulated strategies are successfully implemented.
(f; easy; p. 266)
2. Being long term in nature, strategy implementation affects top and middle managers
but not the lower-level employees.
(f; easy; p. 266)
Marketing Issues
3. An example of a marketing decision is whether or not to limit the share of business

done with a single customer.
(t; medium; p. 266; AACSB: Reflective thinking skills)
4. Given that most information on individuals is available online, the extent to which
companies can track individuals’ movements on the Internet is not a marketing issue
of great concern to consumers today.
(f; medium; p. 266; AACSB: Use of information technology)
5. Market penetration can be defined as the subdividing of a market into distinct

subsets of customers according to needs and buying habits.
(f; easy; p. 257)
6. The marketing mix component factors are product, place, promotion, price and
people.
(f; medium; p. 267)
438
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

7. With market segmentation, a firm can better operate with limited resources.
(t; medium; p. 267)
8. The most common bases for segmenting markets are geographic and demographic.
(t; easy; p. 268)
9. Segmentation often reveals that large, random fluctuations in demand actually

consist of several small, predictable, and manageable patterns.
(t; medium; p. 268)
10. Segmenting industrial markets is generally simpler and easier than segmenting
consumer markets.
(f; medium; p. 226; AACSB: Reflective thinking skills)
11. Generally, market segmentation is followed by market diversification strategy.
(f; medium; p. 268)
12. The next step after segmenting markets so a firm can target particular customer
groups is to find out what customer groups want and expect.
(t; medium; p. 268)
13. In general, the Internet makes market segmentation easier.
(t; easy; p. 269; AACSB: Use of information technology)
14. Multidimensional scaling involves examining three or more criteria simultaneously

in a product-positioning analysis.
(t; medium; p. 270; AACSB: Analytic skills)
15. A firm can usually serve two or more market segments with the same strategy.
(f; medium; p. 271)
16. It is okay for firms to create expectations that exceed the service the firm can or will
offer if it will attract customers.
(f; medium; p. 271)
439

Finance/Accounting Issues
17. Return on assets is the most widely used technique for determining whether debt,
stock, or a combination of debt and stock is the best alternative for raising capital to
implement strategies.
(f; difficult; p. 272; AACSB: Analytic skills)
18. Besides net profit from operations and the sale of assets, the two basic sources of
funds for an ongoing enterprise are debt and equity.
(t; difficult; p. 273; AACSB: Analytic skills)
19. In low earning periods, too much debt in the capital structure of an organization can
endanger stockholders’ returns and jeopardize company survival.
20. Additional capital is often required for successful strategy implementation.
(t; easy; p. 274)
21. An EPS/EBIT chart can be constructed to determine the breakeven point, where one
financing alternative becomes more attractive than another.
22. A reason for concern over the dilution of company stock is a possible hostile
takeover.
(t; medium; p. 274-275; AACSB: Reflective thinking skills)

Ans: T Page: 274-275
23. When additional debt is issued to finance implementation of strategy, ownership and
control of the enterprise are diluted.

Ans: F Page: 274
24. In times of depressed stock prices, stock issuances often prove to be the most
suitable alternative for obtaining capital.

Ans: F Page: 275
440

25. A projected financial analysis can be used to forecast the impact of various
implementation decisions.

Ans: T Page: 278
26. When performing pro forma financial analyses, the balance sheet should be prepared
before the income statement.

Ans: F Page: 278
27. The percent-of-sales method should be used for computing the cost of goods sold
and the expense items in projected income statements.
28. The cash account is used as a plug figure in pro forma balance sheets.
29. The Sarbanes-Oxley Act of 2002 has eliminated the problem of firms inflating
their financial projections, so stakeholders need not worry about the financial
projections of different companies.
30. A financial budget is a document that details how funds will be obtained and spent
for a specified period of time.
(t; medium; p. 283)
31. Limiting an organization’s expenditures is the primary purpose of financial budgets.
(f; easy; p. 283)
32. The most common type of financial budget is the capital budget.
(f; medium; p. 284)
33. Although cash budgets can be a useful financial tool, publicly held companies are
not required to complete them.
(f; difficult; p. 284)
441

34. A limitation of financial budgets is that they can hide inefficiencies if based solely
on precedent rather than on periodic evaluation of circumstances and standards.
(t; difficult; p. 284; AACSB: Reflective thinking skills)
35. All the methods for determining a business’ worth can be grouped into three basic
approaches: what a firm owns, what a firm earns, and what a firm spends.
(f; medium; p. 284-285)
36. A conservative rule of thumb for measuring the value of a firm is to establish a
business’ worth to be 10 times the firm’s most current annual profit.
(f; medium; p. 285; AACSB: Analytic skills)
37. A recommended approach for determining a firm’s worth is to base the analysis on
the selling price of a similar company.
(f; medium; p. 285; AACSB: Analytic skills)
38. To determine the price-earnings ratio, divide the market price of the firm’s annual
earnings per share by the common stock and multiply this number by the firm’s
average net income for the past 10 years.
(f; difficult; p. 285; AACSB: Analytic skills)
39. Goodwill is the estimated values associated with a name brand.
(f; medium; p. 285)
40. Starting in 2009. U.S. companies can drop generally accepted accounting principles
(GAAP) for the more flexible international financial-reporting standards (IFRS).
(t; medium; p. 286)
41. It is generally not recommended for companies with less than $10 million in sales to
go public.
42. In general, there are very little costs associated with going public.
(f; easy; p. 288)
442

43. Buying off the outstanding shares of your company from the open market to make
the company private is what going public means.
(f; medium; p. 288)
Research and Development (R&D) Issues
44. If the rate of market growth and technical progress is fast and there are few barriers
to possible new entrants, then in-house R&D is the preferred solution.
(f; difficult; p. 288; AACSB: Reflective thinking skills)
45. According to research, the most successful new product companies use a research
and development strategy that ties internal strengths to external opportunities and is
linked with corporate objectives.
(t; medium; p. 288)
46. R&D policies can enhance strategy implementation efforts to emphasize product or
process improvements.
(t; medium; p. 288)
47. A major effort in R&D may be very risky if technology is changing rapidly and the
market is growing slowly.
48. One R&D strategy is to be an innovative imitator of successful products.
(t; easy; p. 289)
49. A current trend in R&D management involves the lifting of the veil of secrecy
whereby firms, even major competitors, are joining forces to develop new products.
(t; medium; p. 289)
Management Information Systems (MIS) Issues
50. The process of strategic management is facilitated immensely in firms that have an
effective information system.
(t; medium; p. 290; AACSB: Use of information technology)
443

51. Increased costs are a disadvantage of a good information system.
(f; medium; p. 290; AACSB: Use of information technology)
52. With information technology, in some cases it is possible to do away with the
workplace by allowing employees to work at home or anywhere, anytime.
(t; medium; p. 290; AACSB: Use of information technology)
Multiple Choice
The Nature of Strategy Implementation
53. What percent of strategies formulated are successfully implemented?

a. Less than 10 percent
b. About 30 percent
c. Between 40 to 60 percent
d. Approximately 66 percent
e. More than 80 percent
(a; medium; p. 266)
54. What level of management is directly affected by strategy implementation?

a. plant managers
b. sales managers
c. project managers
d. division managers
e. all of these
(e; easy; p. 266)
Marketing Issues
55. All of the following are examples of marketing decisions that require policies
except:
a. to be a market leader or follower.
b. to advertise online or not.
c. to offer a complete or limited warranty.
d. to use heavy, light, or no TV advertising.
e. to use exclusive dealerships or multiple channels of distribution.
(a; medium; p. 266)
444

56. Which two variables are of central importance to strategy implementation?

a. diversification and budgeting.
b. marketing penetration and competition.
c. competition and collaboration.
d. product development and market development.
e. market segmentation and product positioning.
(e; difficult; p. 267)
57. Subdividing a market into distinct subsets of customers according to their needs and
the way they buy and use a product or service is:
a. market penetration.
b. product diversification.
c. market segregation.
d. market segmentation.
e. positioning.
(d; medium; p. 267)
58. Why is market segmentation an important variable in strategy implementation?

a. all company strategies require increased sales through new markets and
products.
b. it allows a firm to operate with limited resources.
c. mass production, mass distribution and mass advertising are not always
required.
d. market segmentation decisions directly affect marketing mix variables.
e. all of the above
(e; medium; p. 267)
59. Which of the following variables are not directly affected by market segmentation?
a. Product
b. Place
c. Process
d. Promotion
e. Price
(c; medium; p. 267)
445

60. Why is market segmentation an important variable in the strategy-implementation

process?
a. company strategies do not require increased sales through new markets and
products.
b. it allows a firm to operate with no resources.
c. it directly affects marketing mix variables.
d. it allows a firm to minimize per-unit profits and per-segment sales.
e. all of the above
(c; medium; p. 267; AACSB: Reflective thinking skills)
61. Perhaps the most dramatic new market segmentation strategy is the
a. targeting of regional tastes.
b. focusing on universal product.
c. preference of international over domestic sales.
d. treatment of industrial markets.
e. none of these
(a; difficult; p. 267; AACSB: Reflective thinking skills)
62. Matching of which factors would allow factories to produce desirable levels without
extra shifts, overtime or subcontracting?
a. markets and competitors
b. competition and positioning
c. customer behavior and positioning
d. supply and demand
e. segments and demand
(d; difficult; p. 268)
63. Which variable would be considered part of the product element of the marketing
mix?
a. Advertising
b. Packaging
c. Payment terms
d. Inventory levels and location
e. Publicity
(b; easy; p. 268)
446

64. Which variable would be considered part of the place element of the marketing mix?
a. Product line
b. Service level
c. Personal selling
d. Sales territory
e. Discounts and allowances
(b; easy; p. 268)
65. What entails developing schematic representations that reflect how your products or
services compare to competitors’ on dimensions most important to success in the
industry?
a. Positioning
b. Segmentation
c. Penetration
d. Diversification
e. Budgeting
(a; medium; p. 270)
66. Which of these is not a correct step in product positioning?

a. Select key criteria that effectively differentiate products or services in the
industry.
b. Look for a hole or vacant niche
c. Plot major competitors’ products or services in the resultant matrix.
d. Identify areas in the positioning map where the company’s products or
services could be most competitive in the given target market.
e. Develop a marketing plan to position the company’s products and services
appropriately.
(b; medium; p. 270)
67. Looking for a vacant niche helps a company determine

a. its advertising budget.
b. the size of the marketing department.
c. the best place to position a product.
d. the best place to locate a new facility.
e. its projected R & D expenditures.
(c; medium; p. 270)
447

68. Multidimensional scaling is used to determine

a. the size of a new building.
b. the size of a new department.
c. the amount of high-tech equipment a firm needs.
d. product positioning.
e. market segmentation.
(d; difficult; p. 270; AACSB: Analytic skills)
69. Which of the following is (are) true about two different market segments?
a. They can usually be served with the same marketing strategy.
b. They usually require different marketing strategies.
c. They are always in different geographic locations.
d. They are usually incompatible.
e. They are most effective when a firm squats between two segments.
(b; medium; p. 271)
70. Which of these is not a rule of thumb when using product positioning as a strategy-
implementation tool?
a. “Don’t squat between segments.”
b. “Look for the hole or vacant niche.”
c. “Try to serve more than one segment with the same strategy.”
d. “Don’t position yourself in the middle of the map.”
e. All of these are valid rules of thumb.
(c; medium; p. 271)
Finance/Accounting Issues
71. Which of the following is not an example of a decision that may require
finance/accounting policies?
a. To extend the time of accounts receivable
b. To establish a certain percentage discount on accounts within a specified
period of time
c. To lease or buy fixed assets
d. To use LIFO, FIFO, or a market-value accounting approach
e. To determine the amount of product diversification
(e; medium; p. 272)
448

72. In the low earnings period, too much ______ in the capital structure of an
organization can endanger stockholders’ return and jeopardize company survival.
a. debt
b. liquid assets
c. equity
d. cash
e. tax
73. Which of these obligations generally must be met, regardless of circumstances?

a. Dividends
b. Employee
c. Fixed debt
d. Equity
e. all of these
(c; medium; p. 274)
74. What is the most widely used technique for determining the best combination of
debt and stock?
a. Debt-to-stock ratio
b. Earnings per share/earnings before interest and tax analysis
c. Gross profit analysis
d. Capital asset pricing model
e. Present value analysis
(b; medium; p. 273; AACSB: analytic skills)
75. After completing an EPS/EBIT analysis, what conclusions would you make if the
debt line is above the stock line throughout the range of EBIT on the graph?
a. Debt appears to be the best financing alternative.
b. Stock would be the best financing alternative.
c. A combination of debt and stock is probably the best financial alternative.
d. Dividends must be considered before conclusions can be made.
e. The company should be privately owned.
449

76. What becomes a more attractive financing technique when cost of capital is high?
a. stock issuance
b. debt
c. cost cutting
d. borrowing
e. staying privately owned
(a; medium; p. 273)
77. What is a drawback of using only equity to raise capital?

a. The cost
b. Fluctuations in the stock market
c. Dilution of the control of the company
d. That it will cause EPS to roller coaster
e. That it doesn’t raise as much capital as debt financing
(c; medium; p. 275)
78. A benefit of using projected balance sheets and income statements is that
a. an organization can compute projected financial ratios under various
scenarios.
b. money can be put aside to pay future income taxes.
c. insurance needs can be computed.
d. it is useful in analyzing past performance.
e. all of the above
(a; medium; p. 277; AACSB: Reflective thinking skills)
79. Projected financial analysis is an important strategy-implementation technique because

a. it is an exact measurement of financial costs in the future.
b. it is an exact measurement of future company profits.
c. it allows an organization to examine the expected results of various actions
and approaches.
d. insurance needs can be computed.
e. none of the above
(c; medium; p. 278)
450

80. What is a central strategy-implementation technique that allows an organization to

examine the expected results of various actions and approaches?
a. EPS/EBIT
b. Financial budgeting
c. TOWS analysis
d. Projected financial statement analysis
e. External analysis
(d; difficult; p. 278)
81. The first step in preparing a projected statements is to

a. prepare the projected balance sheet.
b. take an inventory of goods.
c. estimate increases in debt.
d. prepare the projected income statement.
e. calculate the projected net income.
(d; easy; p. 278)
82. In preparing projected statements, to project cost of goods sold and the expense
items in the income statement, which of these methods is recommended?
a. Determining the net worth method
b. What a firm earns method
c. Percentage-of-sales method
d. Price-earnings ratio met
e. Outstanding shares method
(c; medium; p. 278; AACSB: Analytic skills)
83. Which element in the projected income statement cannot be forecasted using the
percentage-of-sales method?
a. Cost of goods sold
b. Selling expense
c. Administrative expense
d. Interest expense
e. All of these items are forecasted using the percentage-of-sales method.
(d; medium; p. 279; AACSB: Analytic skills)
451

84. Retained earnings is obtained by subtracting

a. any dividends from net income.
b. net income from EBIT.
c. taxes from EBIT.
d. interest expense from EBT.
e. EBIT from CGS.
(a; easy; p. 279-280; AACSB: Analytic skills)
85. In projected financial statements, what account is used as a plug figure?

a. retained earnings
b. fixed assets
c. cash
d. long-term liabilities
e. stockholders’ equity
(c; medium; p. 280)
86. Which of these is the most common type of budgeting time frame?
a. Daily
b. Quarterly
c. Annual
d. Every decade
e. Monthly
(c; medium; p. 283)
87. If a firm incurs a loss during a particular year, or if the firm had positive net
income but paid out dividends more than the net income, its retained earnings for
that year will most likely be
a. a large positive number.
b. a low positive number.
c. zero.
d. a negative number.
e. Can not be determined from this information.
(d; difficult; p. 279; AACSB: Analytic skills)
88. What is the most common type of financial budget?

a. cash
b. sales
c. profits
d. factory
e. flexible
(a; medium; p. 284)
452

89. Who has mandated that every publicly held company in the United States must issue
an annual cash-flow statement in addition to the usual financial reports?
a. SEC
b. Congress
c. FCC
d. FASB
e. OPEC
(d; easy; p. 284)
90. How should financial budgets be thought of?

a. A tool for limiting expenditures.
b. A method for obtaining the most productive and profitable use of an
organization’s resources.
c. A method for rationing the profits from the past year.
d. A method for determining who should receive the largest pay raise.
e. A tool for forecasting future profits.
(b; medium; p. 283-284)
91. What is a limitation of using financial budgets?

a. They can be so detailed that they are cumbersome and expensive.
b. They can become a substitute for objectives.
c. They can hide inefficiencies if done only on precedent.
d. They are sometimes used as instruments of tyranny.
e. all of the above
(e; easy; p. 284)
92. Which of the following methods is not accepted for determining a business’ worth?
a. What the firm owns.
b. What the firm earns.
c. What the firm’s return on investment has been.
d. What the firm will bring in the market.
e. All of the above are accepted.
93. Which item is/are not included in net worth?

a. Fixed assets
b. Common stock
c. Additional paid-in-capital
d. Retained earnings
e. All of these are included in net worth
(a; difficult; p. 285)

453

94. Which method of determining a firm’s net worth divides the market price of the
firm’s stock by the annual earnings per share and multiplies this number by the
firm’s average net income for the past five years?
a. Debt/equity method
b. Current ratio method
c. Price-earnings ratio method
d. Long-term asset method
e. Outstanding shares method
95. What best describes how much a company is worth?

a. An exact science
b. An educated guess
c. Explicit accounting standards
d. Known only to the firm’s accountants
e. Static
(b; medium; p. 285)
96. The Financial Accounting Standard Board (FASB) Rule 142 deals with
a. illegal inflation of financial projections.
b. hacking issues in MIS.
c. goodwill.
d. how firms conduct R & D.
e. improving marketing policies.
(c; medium; p. 285)
97. What is the best definition of goodwill?

a. Premiums paid for acquisition
b. Value attached to the firms reputation
c. Excess of assets over liabilities
d. Value associated with benefits from environmental programs
e. Excess of current assets over liabilities
(a; medium; p. 285)
454

98. When did/will the international financial-reporting standards (IFRS) apply to U.S.
companies?
a. 2007
b. 2008
c. 2009
d. 2010
e. 2011
(c; medium; p. 286)
99. If an initial stock issuance is at or under $1 million, what is the average total cost
paid to lawyers, accountants and underwriters?
a. 5 percent
b. 10 percent
c. 25 percent
d. 5 percent
e. 40 percent
Research and Development (R&D) Issues
100. R&D employees and managers perform all of the following tasks except:
a. transferring complex technology.
b. alternating products to particular tastes and specifications.
c. researching resource availability.
d. adapting processes to local markets.
e. adjusting process to local raw materials.
(c; medium; p. 288)
101. Which of the following is not a major approach to R&D?

a. To be a pioneer
b. To be an innovative imitator
c. To be a low-cost producer by mass-producing products similar to but less
expensive than products recently introduced
d. To be a liquidator
e. All of the above are major approaches to R&D.
(d; medium; p. 288-289)
455

102. The attitude of U.S. firms toward research and development is best described by
which of the following?
a. The veil of secrecy is being lifted, resulting in more collaboration.
b. Firms are more cutthroat than ever and less cooperative with each other.
c. Firms are less interested in working with universities.
d. Firms are spending less in total research and development expenditures.
e. Firms are less involved with research consortia than ever.
(a; medium; p. 289)
Management Information Systems (MIS) Issues
103. A good information system can allow a firm to

a. gain competitive advantage.
b. reduce costs.
c. increase productivity.
d. increase customers.
e. reduce turnover.
(b; easy; p. 290; AACSB: Use of information technology)
Essay Questions
104. Name five examples of marketing decisions that may require policies.
Student answers may vary. Possible answers include: 1) To use exclusive

dealerships or multiple channels of distribution; 2) To use heavy, light, or no TV
advertising; 3) To limit (or not) the share of business done with a single
customer; 4) To be a price leader or a price follower; 5) To offer a complete or
limited warranty; 6) To reward salespeople based on straight salary, straight
commission, or a combination salary/commission ; 7) To advertise online or not.
Page: 266
456

105. Although there are many marketing variables that impact the success or failure of
strategy-implementation efforts, two variables are central to the process. What are
these variables? Discuss why they are so important.
Two variables of central importance to strategy implementation are market

segmentation and product positioning. Segmentation is important because it is a key
to matching supply and demand, which is one of the thorniest problems in customer
service. Segmentation often reveals that large, random fluctuations in demand
actually consist of several small, predictable and manageable patterns. Product
positioning is important because it is a severe mistake to assume the firm knows
what customers want and expect. Many firms have become successful by filling the
gap between what customers and producers see as good service. What the customer
believes is good service is paramount, not what the producer believes service should
be. Positioning entails developing schematic representations that reflect how a firm’s
products or services compare to competitors’ on dimensions most important to
success in the industry.
Page: 267-271
106. What are the marketing-mix component factors? Give some examples of each.
The marketing-mix component factors consist of product, place, promotion and

price. Please refer to Table 8-1 on page 308 for examples of each factor.
Page: 268
107. What are the five steps required for effective product positioning? Give an example
of a product-positioning matrix for an organization of your choice.
There are five steps required for effective product positioning. These five steps are
as follows: (1) select key criteria that effectively differentiate products or services in
the industry, (2) diagram a two-dimensional product-positioning map with specified
criteria on each axis, (3) plot major competitors’ products or services in the resultant
four-quadrant matrix, (4) identify areas in the positioning map where the company’s
products or services could be most competitive in the given target market and look
for niches and (5) develop a marketing plan to position the company’s products or
services appropriately.
Student examples of product-positioning matrices will vary.
Page: 270
457

108. Name five examples of finance/accounting decisions that may require policies.
Possible answers include: 1) To raise capital with short-term debt, long-term debt,
preferred stock, or common stock; 2) To lease or buy fixed assets; 3) To
determine an appropriate dividend payout ratio; 4) To use LIFO, FIFO, or a
market-value accounting approach; 5) To extend the time of accounts receivable.
6) To establish a certain percentage discount on accounts within a specified period
of time; 7) To determine the amount of cash that should be kept on hand.
Page: 272-273
109. Describe the considerations of EPS/EBIT analysis.
There are four considerations of EPS/EBIT analysis: 1) profit levels may be higher
for stock or debt alternatives when EPS levels are lower; 2) flexibility; 3) dilution of
ownership can be an overriding concern in closely held corporations in which stock
issuances affect the decision-making power of majority stockholders; and 4) timing
in relation to movements of stock prices, interest rates and bond prices becomes
important.
Page: 273-278
110. Explain how to perform a projected financial analysis.
The steps to performing a projected financial analysis are as follows: (1) prepare the
projected income statement before the balance sheet and start by forecasting sales as
accurately as possible; (2) use the percentage-of-sales method to project CGS and
the expense items in the income statement; (3) calculate the projected net income;
(4) subtract from the net income any dividends to be paid and add the remaining net
income to Retained Earnings; (5) project the balance sheet items, beginning with
retained earnings and then forecasting stockholders’ equity, long-term liabilities,
total liabilities, total assets, fixed assets and current assets—in that order; and (6) list
comments on the projected statements.
Page: 284-288
111. Identify and describe three approaches for determining a business’ worth.
The three approaches for determining a business’ worth are what a firm owns, what
a firm earns and what a firm will bring in the market. Please see the discussion on
page 285 under “Evaluating the Worth of a Business” for descriptions of each
approach.
Page: 285
458

112. Explain the important issues involved in deciding whether to go public, i.e., a private
firm considering becoming a public firm. Include cost estimates, advantages and
disadvantages.
Please refer to the entire discussion on page 288 under Deciding Whether to Go
Public for this answer.
Page: 288
113. Discuss guidelines used to determine whether a firm should conduct R&D
internally or externally.
First, if the rate of technical progress is slow, the rate of market growth is
moderate, and there are significant barriers to possible new entrants, then in-house
R&D is the preferred solution. Second, if technology is changing rapidly, and the
market is growing slowly, then a major in-house effort in R&D may be risky.
Third, if technology is changing slowly but the market is growing quickly, there
generally is not enough time for in-house development. Finally, if both technical
progress and market growth are fast, R&D expertise should be obtained through
acquisition of a well-established firm in the industry.
Page: 289
114. List and describe the three major R&D approaches for implementing strategies.
The three major R&D approaches for implementing strategies are: (1) to be the first
firm to market new technological products; (2) to be an innovative imitator of
successful products, thus minimizing the risks and costs of start-up; and (3) to be a
low-cost producer by mass-producing products similar to but less expensive than
products recently introduced.
See page 289 under R&D Issues for descriptions of each approach.
Page: 289
459

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Chapter 8: Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues

1. Less than 2 percent of formulated strategies are successfully implemented.

(f; easy; p. 266)

(f; easy; p. 266)

3. An example of a marketing decision is whether or not to limit the share of business

(t; medium; p. 266; AACSB: Reflective thinking skills)

(f; medium; p. 266; AACSB: Use of information technology)

5. Market penetration can be defined as the subdividing of a market into distinct

(f; easy; p. 257)

(f; medium; p. 267)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

(t; medium; p. 267)

(t; easy; p. 268)

9. Segmentation often reveals that large, random fluctuations in demand actually

(t; medium; p. 268)

(f; medium; p. 226; AACSB: Reflective thinking skills)

11. Generally, market segmentation is followed by market diversification strategy.

(f; medium; p. 268)

(t; medium; p. 268)

13. In general, the Internet makes market segmentation easier.

(t; easy; p. 269; AACSB: Use of information technology)

14. Multidimensional scaling involves examining three or more criteria simultaneously

(t; medium; p. 270; AACSB: Analytic skills)

(f; medium; p. 271)

(f; medium; p. 271)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

(f; difficult; p. 272; AACSB: Analytic skills)

(t; difficult; p. 273; AACSB: Analytic skills)

(t; medium; p. 273; AACSB: Reflective thinking skills)

20. Additional capital is often required for successful strategy implementation.

(t; easy; p. 274)

(t; medium; p. 274; AACSB: Analytic skills)

(t; medium; p. 274-275; AACSB: Reflective thinking skills)

(f; medium; p. 274; AACSB: Reflective thinking skills)

(f; medium; p. 275; AACSB: Reflective thinking skills)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

(t; medium; p. 278; AACSB: Reflective thinking skills)

(f; medium; p. 278; AACSB: Reflective thinking skills)

(t; medium; p. 279; AACSB: Analytic skills)

(t; medium; p. 280; AACSB: Analytic skills)

(f; medium; p. 278; AACSB: Reflective thinking skills)

(t; medium; p. 283)

31. Limiting an organization’s expenditures is the primary purpose of financial budgets.

(f; easy; p. 283)

(f; medium; p. 284)

(f; difficult; p. 284)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

(t; difficult; p. 284; AACSB: Reflective thinking skills)

(f; medium; p. 284-285)

(f; medium; p. 285; AACSB: Analytic skills)

(f; medium; p. 285; AACSB: Analytic skills)

(f; difficult; p. 285; AACSB: Analytic skills)

39. Goodwill is the estimated values associated with a name brand.

(f; medium; p. 285)

(t; medium; p. 286)

(t; medium; p. 288; AACSB: Reflective thinking skills)

(f; easy; p. 288)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

(f; medium; p. 288)

Research and Development (R&D) Issues